Elon Musk will be presenting an update of their ITS plans on the 29th.

Current predictions are that focus has shifted to an "ITSy." This half scale version of the ITS will have 21 engines instead of 42 and still be the strongest rocket ever built, but it's focused more on initial Mars trips instead of full scale colonization.

There are a few reasons why this makes sense:

Fully ITS will cost billions of dollars while this will cost less billions. Overall costs more for both vehicle designs but there's less financial risk at each stage.

ITSy will be used for commercial launches around Earth and pay for itself. With both first and second stage recovery, it should be cheaper than Falcon Heavy for big satellites. Full ITS was only planned for Mars missions.

ITSy can function as a test bed for the full scale design. It'll still have all the same elements involved such as in orbit refueling, Mars refueling, and landing on the launch pad.

The carbon fiber tank for the full scale ITS ruptured during testing. This could be a sign that the tank designs are not ready yet and need more time to solve the problems. ITSy could use more standard fuel tanks and make SpaceX keep progressing while waiting for carbon fiber to catch up.

NASA is planning commercial contracts for the moon. SpaceX could bid ITSy as a lunar lander and have NASA pay for most of the funding, similar to how Dragon and Falcon 9 reusability were developed. ITSy could land significant fuel on the Moon and return to Earth for a fraction of the cost of other methods.

ITSy will be ~9 meters in diameter instead of the 12 meter full scale ITS. This is small enough that ITSy could be created in existing SpaceX factories without the need of constructing new buildings.

It's more realistic to build launch pads that support both Falcon and ITSy. Boca Chica in Texas is being built to support ITSy and will be ready in 2019.

This sounds like a good step for SpaceX, can't wait to see what they've come up with!

Sweetest thing imo is that this rocket might launch extremely soon, maybe even in 2019 if "Elon time" doesn't apply.

The raptor engine is the hardest part of the design and it's nearing completion. Blue Origin is building the New Glenn......and its BE-4 engine is seemingly a bit behind Raptor in development. Plus they're still building the building to create the New Glenn.

Since Blue Origin is still confident in 2020 for their first New Glenn flight, a 2019 ITSy launch seems possible to me.

Some rumors suggest that the ITSy could use the small raptor that was test fired last year. This could get the first ITS version flying incredibly soon. Then the engine would slowly be scaled up in performance, like what happened with Falcon.